What was the Fed trying to achieve after the dot-com bubble burst? What did it really do?

a. After the dot.com bubble burst, in 2001 the US was in a classic AD-shock recession. Draw an AS/AD diagram showing a negative AD shock from the wealth effect of the stock market crash. Label the original, pre-crash equilibrium "a" and the new, first, post-crash short-run equilibrium "b1". Answer in words: how have growth and inflation changed from before the crash?

b. If the AS/AD model is accurate, how could the Fed ameliorate the effects of the Crash? Draw the effects of a monetary policy designed to return the economy to a long-run equilibrium at "a." Answer in words: what did the Fed think their policy was going to do?

c. How does the Fed increase (or decrease) the money supply through open-market operations?

d. What happens to interest rates if the Fed increases the money supply?

e. What other (non-CPI, non- GDP) effects did the change in interest rates have from 2001-2006?